Judge Lisa K. Sepe-Wiesenfeld, Case Number: 21SMCV01654, Date: 2023-11-07 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 21SMCV01654, Date: 2023-11-07 Tentative Ruling

Cross-Complainant/Cross-Defendant Glassfab Tempering Service, Inc. (“Glassfab”) requests judicial notice of Plaintiff CLPF-8777 Washington, L.P. (“Plaintiff”)’s complaint, Defendant/Cross-Complainant Walters & Wolf Glass Company’s cross-complaint, and the Court’s order dated June 16, 2023. While the Court need not take judicial notice of its own case file, Glassfab’s request is GRANTED, pursuant to Evidence Code section 452, subdivision (d).

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

“The right to implied contractual indemnity is predicated upon the indemnitor’s breach of contract, the rationale being that a contract under which the indemnitor undertook to do work or perform services necessarily implied an obligation to do the work involved in a proper manner and to discharge foreseeable damages resulting from improper performance absent any participation by the indemnitee in the wrongful act precluding recovery. An action for implied contractual indemnity is not a claim for contribution from a joint tortfeasor; it is not founded upon a tort or upon any duty which the indemnitor owes to the injured third party. It is grounded upon the indemnitor’s breach of duty owing to the indemnitee to properly perform its contractual duties.” (West v. Superior Court (1994) 27 Cal.App.4th 1625, 1633, quotation marks, ellipses, italics, and citations omitted.)

The quote for the insulated glass units (“IGUs”) at issue in this action, provided by Cross-Defendant Guardian Industries, LLC (“Guardian”) to Glassfab and attached to Glassfab’s Third Amended Cross-Complaint (“TACC”) as Exhibit A, states that “Guardian will not be liable for damage caused to third parties, or for consequential or indirect loss.” (TACC ¶ 11, Ex. A, at ¶ 9.) The quote further provides that “Guardian will not be liable for any defect or non-conformity of which it is not notified.” (TACC ¶ 11, Ex. A, at ¶ 10.)

Glassfab alleges that an agreement was “formed between Glassfab and Guardian based only on the product, price, and quantity terms proposed in Guardian’s quote, which were memorialized in Glassfab’s purchase orders, as well as terms not stated in Guardian’s quote, including but not limited to Guardian’s limited warranty terms and performance specifications for SunGuard IGUs.” (TACC ¶¶ 18, 37.) Glassfab further alleges that Guardian confirmed the material terms of the purchase orders when it sent back invoices without attaching any terms and conditions but instead including boilerplate terms in small print at the bottom of the invoices, which was inconsistent with the terms and conditions contained in Guardian’s quote. (TACC ¶¶ 19, 38.) Glassfab also points to paragraph 8 of the quote, which states that “Guardian provides additional written limited warranties for certain fabricated and coated products, and Guardian will make those warranties available to you” (TACC ¶ 11, Ex. A, at ¶ 8) and the “Guardian SunGuard Limited Warranty” which expressly warrants that SunGuard coated glass products will not contain manufacturing defects that result in visible deterioration in the coating for 10 years from the shipment date (TACC ¶ 12, Ex. E).

Again, the terms of the quote provide that Guardian is not liable for any damage to third parties, and it is not liable for any defect of which it was not notified. Glassfab now points to paragraph 42 of the TACC, which alleges that SunGuard SNX 51/23 coating separately damaged the glass substrate and that cover caps and gaskets were also damaged during the removal of the IGUs from the building. Glassfab also references paragraph 51 of the TACC, which alleges that the SunGuard SNX 51/23 coating caused component-to-component damage necessitating the removal and replacement of the IGUs.

As the Court stated in its two prior rulings, under the economic loss rule in construction defect cases, a party may not recover for “purely economic losses, i.e., those not accompanied by either property damage or physical injuries.” (Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1210.) Plaintiff represents that the IGUs caused damage to other components, and it follows that KB Home v. Superior Court (2003) 112 Cal.App.4th 1076, 1087 requires a determination of whether the IGU “is a sufficiently discrete element of the larger product” so it would not be reasonable to expect its failure “to damage other portions of the finished product.” The Second District Court of Appeal made clear that such a determination “should be left to the trier of fact.” (Ibid.) Guardian argues that Glassfab has failed to allege facts that would support a finding that a defect in the SunGuard coating would not also damage the other component parts, but the Court finds that the allegations sufficiently state that the coating damaged other components, and the Court cannot determine without evidence whether it is reasonable to expect that a failure in the coating would not damage other components. While the evidence may show that Glassfab’s claims fall within the purview of the economic loss rule and are barred under KB Home v. Superior Court, supra, 112 Cal.App.4th 1076, this must be determined by the trier of fact. Accordingly, Guardian’s demurrer to the first cause of action is OVERRULED.

To state a cause of action for breach of contract, Glassfab must allege “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) “The essential elements of a warranty cause of action are: 1. There was a sale of goods; the defendant was the seller, and plaintiff a buyer; 2. Defendant expressly or impliedly warranted the goods sold; 3. There was a breach of warranty; [] 4. The breach of warranty caused plaintiff to suffer injury, damage, loss or harm[]; and 5. The plaintiff gave defendant timely notice of the breach of warranty.” (Scott v. Metabolife International, Inc. (2004) 115 Cal.App.4th 404, 415-416.)

In the TACC, Glassfab denies that the IGUs were defective or needed to be replaced. (TACC ¶¶ 57, 71.) Glassfab then alleges that Plaintiff has alleged the IGUs were defective, and Walters & Wolf Glass Company has alleged that Glassfab is liable for damages arising from the allegedly defective IGUs, and if the trier of fact concludes that Plaintiff’s or Walters & Wolf Glass Company’s allegations are true, then Glassfab alleges that Guardian’s conduct in supplying the IGUs was a substantial factor in causing the harm alleged by Plaintiff and Walters & Wolf Glass Company. (TACC ¶¶ 56-56, 70-78.)

As the Court stated in its prior order, Glassfab’s cause of action for breach of contract and breach of express warranty are claims for indemnity, not breach, as Glassfab continues to deny liability. Insofar as these claims seek indemnification, they fail for the same reasons discussed above. Glassfab continues to rely on Plaintiff’s allegations of the defects while stating that it denies the IGUs were defective, and it has provided no new facts in this regard. A party cannot bring a breach of contract or breach of express warranty claim while also alleging that no defect existed; while a party may allege inconsistent theories of recovery, one cannot allege contradictory facts within its pleading, thereby denying Guardian, the Court, and the trier of fact of a clear theory of liability. Thus, Guardian’s demurrer to the second and third causes of action is SUSTAINED without leave to amend.